Note 5. Equity-based Awards

An allocated portion of the fair value of EPCO's equity-based awards is charged to us under the ASA. The following table summarizes the compensation expense we recognized in connection with equity-based awards for the periods indicated:

	For the Year Ended December 31,
	2013		2012		2011
Restricted common unit awards	$	71.5	$	57.0	$	47.5
Unit option awards		0.8		1.3		3.1
Other (1)		0.5		1.7		0.3
Total	$	72.8	$	60.0	$	50.9

(1)	Primarily represents expense associated with unit appreciation rights ("UARs") and similar awards.

The fair value of equity-classified awards (e.g., restricted common unit and unit option awards) is amortized to earnings over the requisite service or vesting period. Compensation expense for liability-classified awards (e.g., UARs) is recognized over the requisite service or vesting period based on the fair value of the award remeasured at each reporting date. Liability-classified awards are settled in cash upon vesting.

At December 31, 2013, EPCO's significant long-term incentive plans applicable to us were the Enterprise Products 1998 Long-Term Incentive Plan ("1998 Plan") and the 2008 Enterprise Products Long-Term Incentive Plan (Third Amendment and Restatement) ("2008 Plan").

The 1998 Plan provides for awards of our common units and other rights to our non-employee directors and to employees of EPCO and its affiliates providing services to us. Awards under the 1998 Plan may be granted in the form of unit options, restricted common units, phantom units and distribution equivalent rights ("DERs"). Up to 7,000,000 of our common units may be issued as awards under the 1998 Plan. After giving effect to awards granted under the 1998 Plan through December 31, 2013, a total of 1,155,630 additional common units could be issued.

In September 2013, our unitholders approved the third amendment and restatement of the 2008 Plan, which was also approved by the Audit and Conflicts Committee (the "AC Committee") of the Board of Directors of our general partner. The 2008 Plan (as amended and restated) is a long-term incentive plan under which any employee or consultant of EPCO, us or our affiliates that provides services to us, directly or indirectly, may receive incentive compensation awards in the form of options, restricted common units, phantom units, DERs, UARs, unit awards, other unit-based awards or substitute awards. Non-employee directors of our general partner may also participate in the 2008 Plan.

The 2008 Plan is administered by the AC Committee, which has significant authority thereunder to, among other things, (i) designate participants; (ii) determine the type or types of award(s) and the number of common units to be covered by any award; (iii) determine the terms and conditions of any award; and (iv) determine whether, to what extent and under what circumstances participants may settle, exercise, cancel or forfeit any award.

The maximum number of common units available for issuance under the 2008 Plan was 10,000,000 at December 31, 2013. This amount automatically increased under the terms of the 2008 Plan by 2,500,000 common units on January 1, 2014 and will continue to automatically increase annually on January 1 thereafter during the term of the 2008 Plan; provided, however, that in no event shall the maximum aggregate number exceed 35,000,000 common units. The 2008 Plan is effective until September 30, 2023 or, if earlier, until the time that all available common units under the 2008 Plan have been delivered to participants or the time of termination of the 2008 Plan by the Board of Directors of EPCO or by the AC Committee. After giving effect to awards granted under the 2008 Plan through December 31, 2013, a total of 4,348,820 additional common units could be issued.

Restricted Common Unit Awards

Restricted common unit awards allow recipients to acquire our common units (at no cost to the recipient apart from service or other conditions) once a defined vesting period expires, subject to customary forfeiture provisions. As used in the context of EPCO's long-term incentive plans, the term "restricted common unit" represents a time-vested unit. Restricted common unit awards generally vest at a rate of 25% per year beginning one year after the grant date. Such awards are non-vested until the required service period expires. Restricted common units are included in the number of common units presented on our Consolidated Balance Sheets.

The fair value of a restricted common unit award is based on the market price per unit of the underlying security on the date of grant. Compensation expense is recognized based on the grant date fair value, net of an allowance for estimated forfeitures, over the requisite service or vesting period.

The following table presents information regarding restricted common unit awards for the periods indicated:

				Weighted-
				Average Grant
	Number of			Date Fair Value
	Units			per Unit (1)
Restricted common units at December 31, 2010		3,561,614		$	29.78
Granted (2)		1,414,630		$	43.66
Vested		(924,108	)	$	31.54
Forfeited		(183,920	)	$	34.27
Restricted common units at December 31, 2011		3,868,216		$	34.22
Granted (3)		1,588,738		$	51.96
Vested		(1,316,603	)	$	34.80
Forfeited		(246,865	)	$	40.43
Restricted common units at December 31, 2012		3,893,486		$	40.87
Granted (4)		1,774,526		$	57.22
Vested		(1,885,348	)	$	34.97
Forfeited		(172,057	)	$	47.63
Restricted common units at December 31, 2013		3,610,607		$	51.66

(1)	Determined by dividing the aggregate grant date fair value of awards (before an allowance for forfeitures) by the number of awards issued.
(2)	The aggregate grant date fair value of restricted common unit awards issued during 2011 was $61.8 million based on a grant date market price of our common units ranging from $40.54 to $44.67 per unit. An estimated annual forfeiture rate of 4.6% was applied to these awards.
(3)	The aggregate grant date fair value of restricted common unit awards issued during 2012 was $82.5 million based on a grant date market price of our common units ranging from $51.92 to $53.54 per unit. An estimated annual forfeiture rate of 3.25% was applied to these awards.
(4)	The aggregate grant date fair value of restricted common unit awards issued during 2013 was $101.5 million based on a grant date market price of our common units ranging from $57.11 to $63.48 per unit. An estimated annual forfeiture rate of 3.9% was applied to these awards.

Typically, each recipient is also entitled to nonforfeitable cash distributions equal to the product of the number of restricted common units outstanding for the participant and the cash distribution per unit paid to limited partners. Since these restricted common units are participating securities, such distributions are included in "Cash distributions paid to limited partners" as presented on our Statements of Consolidated Cash Flows.

The following table presents supplemental information regarding our restricted common unit awards for the periods indicated:

	For the Year Ended December 31,
	2013			2012			2011
Cash distributions paid to restricted common unitholders		$	10.6		$	10.5		$	9.6
Total intrinsic value of restricted common unit awards that vested during period		$	109.9		$	67.0		$	39.1

For the EPCO group of companies, the unrecognized compensation cost associated with restricted common unit awards was an aggregate $72.8 million at December 31, 2013, of which our allocated share of the cost is currently estimated to be $66.2 million. We expect to recognize our share of the unrecognized compensation cost for these awards over a weighted-average period of 1.9 years.

Unit Option Awards

EPCO's long-term incentive plans provide for the issuance of non-qualified incentive options. These unit option awards are denominated in our common units. When issued, the exercise price of each unit option award may be no less than the market price of our common units on the date of grant. In general, unit option awards have a vesting period of four years from the date of grant and expire at the end of the calendar year following the year of vesting (e.g., an option vesting on May 29, 2012 would have expired on December 31, 2013). However, unit option awards only become exercisable at certain times during the calendar year following the year in which they vest (typically the months of February, May, August and November).

The fair value of each unit option award is estimated on the date of grant using a Black-Scholes option pricing model, which incorporates various assumptions including expected life of the option, risk-free interest rates, expected distribution yield of our common units, and expected price volatility of our common units. In general, our assumption of expected life of the options represents the period of time that the options are expected to be outstanding based on an analysis of our historical option activity. Our selection of risk-free interest rates is based on published yields for U.S. government securities with terms comparable to the expected life of the option. The expected distribution yield and unit price volatility assumptions are estimated based on several factors, which include an analysis of historical price volatility and distribution yield over a period of time equal to the expected life of the option. Compensation expense recorded in connection with unit option awards is based on the grant date fair value, net of an allowance for estimated forfeitures, over the requisite service or vesting period.

The following table presents unit option award activity for the periods indicated:

							Weighted-
				Weighted-			Average
				Average			Remaining	Aggregate
	Number of			Strike Price			Contractual	Intrinsic
	Units			(dollars/unit)			Term (in years)	Value (1)
Unit option awards at December 31, 2010 and 2011		3,753,420			$	28.08
Exercised		(742,280	)		$	30.77
Forfeited		(250,000	)		$	27.45
Unit option awards at December 31, 2012 (2,3)		2,761,140			$	27.41
Exercised		(736,140	)		$	29.95
Unit option awards at December 31, 2013 (2,3)		2,025,000			$	26.49	1.3	$	57.0

(1)	Aggregate intrinsic value reflects fully vested unit option awards at the date indicated.
(2)	At December 31, 2013 and 2012, we were committed to issue 2,025,000 and 2,761,140, respectively, of our common units if all outstanding unit option awards were exercised. Option awards outstanding at December 31, 2013 include 1,330,000 awards that vested during 2013 and became exercisable beginning in February 2014. Of the remaining outstanding option awards at December 31, 2013, 695,000 will vest in 2014 and become exercisable in 2015.
(3)	None of the unit option awards outstanding at December 31, 2013, 2012 and 2011 were exercisable.

In order to fund its unit option award-related obligations, EPCO may purchase common units at fair value either in the open market or directly from us. When employees exercise unit option awards, we reimburse EPCO for the cash difference between the strike price paid by the employee and the actual purchase price paid by EPCO for the units issued to the employee.

The following table presents supplemental information regarding our unit option awards during the periods indicated:

	For the Year Ended December 31,
	2013			2012			2011
Total intrinsic value of unit option awards exercised during period		$	19.8		$	14.6		$	--
Cash received from EPCO in connection with the exercise of unit option awards		$	11.5		$	10.2		$	--
Unit option award-related cash reimbursements to EPCO		$	19.8		$	14.0		$	--

For the EPCO group of companies, the unrecognized compensation cost associated with unit option awards was an aggregate $0.1 million at December 31, 2013. We expect to be allocated substantially all of the cost of these awards during the first quarter of 2014.